Market News & Headlines >> Soybean Supplies Still Large
The USDA reports released on Jan. 12 were somewhat friendly for the soybean market, but really did little to change the overall supply/demand picture, which remains weak.
USDA surprised the soybean trade mildly by lowering its estimate of the 2015 U.S. soybean crop by 51 million bushels to 3.930 billion on lower harvested acreage and yields, as pre-report trade crop expectations averaged just 8 million bushels below USDA’s previous estimate.
Dec. 1 soybean stocks were closely in line with trade expectations, coming in at 2.715 billion bushels, just 5 million below the average of pre-report estimates and up 7.4% from a year earlier and record high for the date.
The smaller crop still led USDA to cut its forecast for 2015-16 U.S. ending stocks by 25 million bushels to 440 million bushels, toward the low end of trade estimates that averaged 3 million bushels above USDA’s previous forecast of 468 million bushels.
However, at 440 million bushels, U.S. soybean ending stocks would still be the second largest on record behind 2005-06, with the projected stocks/usage ratio of 11.9% below the previous estimate of 12.4%, but still the highest since 2006-07.
USDA cut projected U.S. soybean usage, trimming 25 million bushels off its forecast for 2015-16 exports and also trimmed its projection for U.S. soymeal exports due to slowing sales amid increased competition from Argentina.
As a result, prices are expected to stay weak. USDA lowered its forecast range for the 2015-16 on-farm average price of soybeans by a dime on both ends to $8.05-$9.55 per bushel.
USDA cut its forecast for 2015/16 world soybean ending stocks by 3.3 million metric tons (121.2 million bushels) to 79.28 million tons, nearly 1.5 million tons below the low end of trade expectations. However, world stocks are still forecast to be up 2.35 million tons from a year earlier to the highest level on record.